Desert Divas defendant sentenced

Late this afternoon 57 year-old Peter Shifman of Apache Junction was sentenced to three years in prison and ordered to pay a $100,000 fine. Shifman pleaded guilty to money laundering and wire fraud. As the company’s accountant, Shifman created financial statements and made bank deposits on behalf of the enterprise.

Phoenix Police called the year-long investigation the largest prostitution case in the state’s history. It spanned four states. More than 100 people were arrested in connection with the internet-based criminal syndicate. Most of them were women who allegedly worked as escorts.

Prosecutors alleged that Shifman set up the business structure in such a way to improve the “deniable culpability” of company leaders in case they were ever caught.

Earlier this week, Shifman spoke with 12 News about his observations and his role with the company. Shifman says prosecutors exaggerated the scope of his involvement in the company. He says he tried to take advantage of tax laws, as any smart business owner would do. But Shifman says he never hid money from the IRS, as alleged by the prosecution. However he acknowledged that he broke the law.

“Because I made bank deposits on behalf of a business which at the time I did not know was illegal, I committed money laundering,” Shifman said.

Shifman worked as the personal and professional accountant of Night Partners Entertainment CEO Paul Nichta. Nichta pleaded guilty to illegal control of an enterprise, money laundering and illegal use of a wireless or electronic device. His sentencing is scheduled later this month.

Shifman says when the company retained him in 2007, he did not know that it was a prostitution ring. Instead, Shifman says he believed it was a legitimate escort service. He says he researched the company and discovered that it always renewed its business license on time and had no history of civil complaints.

“Towards the end I felt there was something going on that was more than I was being told. Initially, I had very little contact with the young ladies. If I ever talked to them it was strictly an accounting question,” Shifman said.

According to court records, numerous alleged prostitutes interviewed by police said anyone working closely with the company would notice the signs of an illegal enterprise. Several women claimed that “you would have to be stupid to not know it was a prostitution business,” according to court records.

Shifman says he told one company attorney about his suspicions and was assured everything was done legally.

“I had no hard evidence. I never saw anything, I never heard anything. I never talked to any of the quote, ‘customers’,” Shifman said.

During Thursday's sentencing hearing, several former business associates of Shifman testified that he was an honest accountant who followed the law.

The 22-year accountant says he was embarrassed by the media coverage that portrayed him as one of the key players of the prostitution ring. On the day the charges were announced, Police released video of Shifman’s arrest as he was escorted in handcuffs out of the offices of Night Entertainment Partners.

Shifman spent more than a month in jail on a one million dollar cash bond before another judge lowered the amount. In response to whether he felt unfairly targeted by police and prosecutors, Shifman said it’s a hard question to answer.

“For myself who has never been in trouble with the law before, family based, 20-something years in Arizona, no violent crimes, no drugs…. my bond was a million dollars cash. So is the system fair, was I treated fairly? That’s for the public and anyone else to try to determine,” Shifman said.